B2B Customer Engagement Strategy - 2Excell2excell.com/wp-content/uploads/Customer-Engagement-Strategy.pdf · B2B Customer Engagement Strategy page 1 Introduction B2B Fundamentals

B2B Customer Engagement Strategy page 1w w w . c e o o n l i n e . c o m

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Michael Haynes2excell Consulting

B2B Customer Engagement StrategyWritten by:

w w w . c e o o n l i n e . c o m


For over 4 years, Michael was the head of customer research for the Wholesale division of the Telstra Corporation, Australia’s largest telecommunications company. In this capacity, Michael developed and implemented a comprehensive Customer Insights and Satisfaction Program which included strategic customer workshops, an operational service tracking program as well as the design and implementation of a customer insights decision support tool.

Michael has an MBA in Marketing and International Business from Dalhousie University in Halifax, Canada. He is a member of the Executive Scholar Program at the Kellogg School of Management in Chicago where he has completed courses in Customer Insights and B2B Marketing Strategy.

Michael has written articles on B2B Customer Engagement and Insight that have been published in Australia, Canada and the United States. He is also a member of the Business Marketing Association, Canadian Australian Chamber of Commerce as well as the Association of Independent Information Professionals.

Phone: +61 2 8088 0785

Email: [email protected]

Website: www.2excell.com

Michael Haynes2excell Consulting

Learning Module


Author Profile

Michael has over 14 years experience in the areas of customer insights, research

and strategy

mailto:[email protected]

http://www.2excell.com

http://www.2excell.com

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Introduction

B2B Fundamentals

The Fully Engaged Customer

Pre-Requisites To Becoming Customer-Centric

Creating Impact / Delivering Value

Developing A Customer Insights Program

B2B Customer Engagement Strategy2

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The role of B2B suppliers and service providers is to understand, create and deliver value to their business customers.

This creates a win / win situation for both business’. This is more easily achieved by B2B businesses encouraging fully engaged customer relationships.

This Learning Module will take you through creating your own customer engagement strategy, so that you can realise benefits for your B2B business that include:

Improved financial performance •

Customer loyalty •

Customer advocacy•

Introduction

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What is business to business (B2B)?

“B2B refers to business markets in which firms, institutions or governments that acquire goods and services either for their own use, to incorporate into the products or services that they produce or for resale along with other products and services to other firms, institutions or governments.”(Source: Business Market Management: Understanding, Delivering and Creating Value by James Anderson, James Narus and Das Narayandas, 2009)

B2B Includes firms that operate primarily in business to • consumer (B2C) markets but also interact with wholesalers and distributors

Some firms will operate in both B2B and B2C markets •

Examples include airlines, banks and telecommunication companies•

B2B transactions apply to products (for example, aircraft parts suppliers selling components to aircraft manufacturers) and can also apply to services (for example, a technology consulting firm providing project management and systems integration services to a financial services company).

Characteristics of business (B2B) markets

B2B markets have a number of unique characteristics:

Complex, in terms of the deals, contracts and technologies involved •

Large dollar amounts and often risky transactions •

A small number of customers can account for a large percentage of a customer’s • revenues

Suppliers and customers work closely together for an extended period of time •

The B2B buying process is comprised of multiple participants: •

Decision-Makers • - those who make the choice of supplier / service provider

Influencers• - those who do not make the actual decision, but provide significant input that influences the decision

End Users • - those that actually use the product or service provided Note: These roles may not be mutually exclusive. For instance, in some organisations, a decision maker may also be a user. Similarly a user may also be an influencer.

B2B Fundamentals

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Therefore it is important to understand your customer’s organisational structure and buying decision processes.

Creating value: The role of B2B suppliers and service providers

The role of B2B suppliers and service providers is to understand, create and deliver value to their business customers.

In order to successfully do this requires suppliers and service providers to:

Regularly engage with their business customers •

Obtain a deep understanding of their customers’ objectives, • requirements and preferences

Respond to customer requirements where appropriate and • feasible to do so

By doing so, a “win-win” is created whereby your customers obtain what they require to meet their objectives and your organisation is able to drive its financial performance by effectively attracting, acquire, retaining and growing your business customers.

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It is important not to confuse customer engagement with customer satisfaction.

CUSTOMER SATISFACTION CUSTOMER ENGAGEMENT

Means the company is doing its job providing the products and services for which they are suppose to provide and nothing more!

Is simply a starting point, as all customers expect to be satisfied

Is the dialogue and interactions apart from the sales transaction

Enables the customer voice to be heard and acted upon

Results in the customer having a bond with the organisation - which is critical to your long-term financial success

To drive customer behaviour and financial performance, your company must go beyond simply satisfying customers. You must CONNECT with customers on a much deeper level.

You must create Fully Engaged Customers.


The aim of customer engagement is to create the Fully Engaged Customer who is satisfied on two levels:


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Benefits of the Fully Engaged Customer

There are numerous benefits as to why B2B suppliers and service providers want to have fully engaged customers.

Improved financial performance • Studies conducted by Gallup Consulting have shown that organisations with engaged customers experience an average 23% premium in terms of:

Revenues• Profitability• Share of wallet •

Loyalty • Engaged business customers will purchase more of their required goods and services from you. In some cases, even exclusively.

Advocacy • Referrals and recommendations are an important part of the B2B buying decision process. 60% of B2B buyers will engage with at least one peer before making a buying decision. Therefore, creating engaged customers will help to generate the referrals and recommendations that are critical in acquiring new business.

Creating the Fully Engaged Customer

Creating Fully Engaged Customers requires suppliers and service providers CREATE IMPACT by doing three key things:

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In order to attract, retain and grow clients and customers, you must continually be understanding and responding to your customers’ needs.

Use the following worksheets to help in identifying and ensuring adequate resources for a customer-centric culture:

CULTURE AND SENIOR LEADERSHIP

To be a customer-centric organisation, you must appoint a Senior Leadership Champion/s that will support and commit to ensuring that all decisions, strategies and operations are heavily driven by customer requirements and preferences.

To achieve this, the senior leadership team must:

Engage with customers directly so they have • first hand knowledge of their issues, priorities and requirements

Create and foster a culture of cross-functional collaboration and information sharing •

Must make their management teams accountable for working towards creating a • customer-centric culture

Must implement key performance indicators and compensation schemes to working in • a customer-centric manner

Pre-Requisites To Becoming Customer-Centric

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IN YOUR CUSTOMER-CENTRIC ORGANISATION:

Who could be appointed as your Senior Leadership Champion/s?

Do they have adequate time away from existing responsibilities to engage directly with customers and drive culture change? If not, what will have to change?

Are there existing channels that can be used for cross-functional collaboration and information sharing? If not, what will need to change to make this happen?

How can your management team/s be held accountable? What KPIs will keep them accountable for acting in a customer-centric manner?

How can you connect your compensation schemes to these KPIs? Note some preliminary figures here.

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ANALYTICAL CAPABILITIES

To become customer-centric, your organisation must possess strong capabilities in analysing the following kinds of data:

Market •

Customer •

Competitor •

Financial• These skills are critical in order for your organisation to be able to:

Understand market and customer requirements •

Identify opportunities, financial impacts and potential competitive responses •

Determine your organisation’s strategic priorities•


Who has the capabilities to analyse market, customer, competitor and financial data? (May be more than one person)

If you don’t have these capabilities at the moment, what will you do to meet this need?

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STRATEGIC CAPABILITIES

Your organisation must also possess the capabilities to:

Develop strategies to attract, acquire and grow clients / customers •

Identify, execute and manage projects to address identified customer needs•

Effective execution requires:

A customer-centric culture •

Cross-functional collaboration •

Sharing of information and resources•


Who has the capabilities to develop strategies, identify, execute and manage projects?(May be more than one person)

If you don’t have these capabilities at the moment, what will you do to meet this need?

How will you support effective execution? What resources are already in place? What will need to change to meet this need?

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DEFINED PROCESSES

Defined processes are needed to:

Analyse industry, market, customer and competitor • data

Integrate insights into business planning • processes

Create and manage projects / initiatives •

Communicate insights to management and • stakeholders

Processes should be developed cross-functionally to ensure that they take into account the considerations and requirements of the business units / teams that will be involved in such activities. It will also help ensure buy-in that the processes are adhered to.


Do those you’ve nominated have the capability and authority to define cross-functional processes?

If they don’t have these capabilities / authority at the moment, what will you do to meet this need?

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KNOWLEDGE MANAGEMENT

In order to function in a systematic, cross-functional, customer-centric manner, your organisation must have a central repository that can be accessed by all relevant parties - in short, a Knowledge Management System (KMS).

A KMS will enable your organisation to:

Gather and store customer insights •

Share information across the organisation • for use by management, project teams and business units

Link projects to specific segment or customer • needs

Track projects as well as internal/customer • communications

Benefits of using a KMS include:

Enables management and business units to have access and visibility to the • information

Assists organisations in executing initiatives to deliver the outcomes sought by its • customers


Do you have an existing KMS? If so, will it meet your requirements? Does it need to be updated, upgraded or replaced?

If you don’t have a KMS at the moment, what will you do to meet this need?

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Creating impact and value for both your organisation and your business customers requires that your business undertakes a planned, strategic approach.

The value based action oriented approach

Customer engagement and action MUST be an ongoing process!

Step 1: Gathering business customer feedback

A deep understanding of customer needs is obtained through analysis of diverse sets of data that have the potential to significantly impact business performance.

However it is important to remember that in B2B, customer feedback can be obtained from two levels: Decision-Maker and End Users.

Depending on the size and structure of the organisation, an individual may occupy more than just one of these roles.

The following chart outlines some types of customer feedback mechanisms that can be used at each level of the organisation:

AUDIENCE TYPE OF FEEDBACK MECHANISMS

Decision -Makers

Executive-level insight on key company objectives, priorities, requirements, industry direction

Strategic customer discussionsExecutive customer advisory panelsExecutive forums

End Users Product or service improvements Strategic customer discussionsSurveysFocus groupsUser groupsSocial media networks

It is critical that you obtain customer feedback from the executive level to ensure that your organisation has an understanding of the implications of industry shifts, globalisation, disruptive technologies and competitive landscape.

Creating Impact / Delivering Value

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Step 2: Analyse business customer needs

To understand your business customers needs, you must analyse:

What customers say

Customer feedback on requirements, preferences, desired improvements obtained • from surveys, strategic customer discussions (eg. Interviews, customer visits, customer advisory panels)

3rd party research / industry reports•

What customers actually do

Sales data •

Operations data (eg. Orders, inquiries, service • calls, complaints)

Campaign data (Responses, purchases, click-• throughs)

Online behaviour (Participation, downloads, click-throughs) •

Business demographic information

Location, size, products / services offered, key markets, strategic objectives / priorities •

Segment profiles •

External environment data

Information on economic, industry or regulatory trends •

Technology developments •

Competitor data•

TIPS ON CONDUCTING ANALYSIS

What is the business objective? •

What insights are required to meet the business objective? •

What questions must be answered to meet the business objective? •

What data is required? How can this data be obtained?•

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Step 3: Prioritise

Once you have gained an understanding of your business customer / client needs, the management team must decide as to which customer needs will be addressed.

Presenting analysis to the Senior Management Team

Convey the findings to the senior management team in a compelling manner, not simply a “data dump” but rather provides them with:

Recommendations as to possible courses of action •

Implications on business impact•

When presenting data, consider using:

Simulations, scenarios, pilot projects / trials, management briefings •

Pictures and visuals where possible to convey complex ideas •

The “Rule of 3”: •

Storytelling •

Simplicity •

Appealing to emotion and senses•

Set criteria should be used to determine which customer needs to be actioned. Both the criteria and the customer needs should have cross-functional agreement.

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PRIORITISATION CRITERIA

Use the following criteria as a starting point for pritoritising which customer needs will be addressed in your customer-centric organisation:

Proposed customer engagement initiative:

Is the initiative in alignment with the business’ strategic intent?

What, if any, risks are involved?

What are the financial impacts? (Investment required, revenue generation)

What will be the impact on the company image and reputation?

How many and what type of customers will be impacted (and their strategic importance)?

What will be the impact on the customer relationship? The likely customer response?

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Step 4: Execute and manage

STEPS TO EXECUTION YOUR NOTES

Define Projects

Determine scope of work to be undertaken to meet customer requirements

Assign accountability to a member of the senior management team for execution and completion

Mobilise Resources

Identify and obtain resources (eg. Staff, data, equipment)

Assign project roles and responsibilities

Commence Work

Develop project plan

Obtain project plan sign off

Manage Project

Manage initiatives to defined project plan

Provide regular updates to senior management on progress, issues and exceptions

Update customers on key developments

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Step 5: Customer communication

While it is important that you obtain customer feedback regarding their requirements, preferences and priorities, it is also crucial that you convey back to your customers the following:

What insights were gained from the strategic discussions •

How insights will be used •

What the organisation WILL DO (in responding to customer needs) •

What the organisation WILL NOT DO (in responding to customer needs)•

A variety of methods can be used for the customer communications:

Formal correspondence •

Newsletters / e-Newsletters •

Client / customer meetings •

Online (eg. via website, blogs) •

Face-to-face (eg. Customer meetings, executive briefings)•

The choice of communication medium should be based on the intended recipients (eg. Decision-Makers or End Users) and the mechanism that is most appropriate and relevant for them:

Communication Medium Decision-Makers End Users

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Additional sources of B2B customer insights

In addition to the customer feedback mechanisms already mentioned, other sources of insight of your business customers requirements, preferences and priorities include:

Customer advisory councils •

Executive summits •

Segmentation studies •

Focus groups •

Relationship surveys •

Operational surveys •

Call / contact centre feedback•

SETTING UP A CUSTOMER INSIGHTS PROGRAM

Determine what your organisation’s key strategic priorities and objectives are:

What insights are required?

How / where can these insights be obtained?

Developing A Customer Insights Program

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Identify the following in your customer base:

Key Customers Strategic Customers At-Risk Customers

Those that account for a large % of your revenues

Those “high growth / high potential” customers

that you seek to obtain a greater share of their

business

Those customers who are likely to switch to another

provider

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START WITH WHAT YOU KNOW: CUSTOMER INSIGHTS AUDIT

Decide on a representative scope (which customers, how many). Gather all existing sources of customer research / insights. Analysing this data, answer the following:

What are your customers’ requirements and value drivers? (Note: You need to understand those of Decision-Makers - not just End Users)

What are your customers’ objectives and priorities?

What are your customers’ key issues?

What are your customers’ buying criteria?

Are there any gaps in your understanding of specific customers or customer types?

How will these gaps be filled?

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DESIGNING AND IMPLEMENTING A CUSTOMER INSIGHTS PROGRAM

What types of customer feedback mechanisms will be used?

How frequently will you obtain customer feedback?

Who are the recipients and users of customer insights?

Who will have responsibility for keeping your Customer Insights KMS up-to-date?

Below is an in-depth look into one of the available mechanisms, the “Strategic Customer Discussion”.

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STRATEGIC CUSTOMER DISCUSSIONS

Definition: In depth discussions that B2B suppliers and service providers have with their customers

Strategic customer discussions provide a deep understanding of customers/clients’ requirements and preferences. They also generate more detailed insights then can be obtained by other methods, such as surveys.

Strategic customer discussions enable organisations to:

Tailor current products and service offerings •

Develop new or improved products and service • offerings

Gain new customers• There are numerous variations of such discussions including:

In-depth interview •

Customer workshop •

Customer visit•

Characteristics of strategic customer discussions

Effective strategic customer discussions include the following:

Conducted by the supplier firm itself •

At a minimum, conducted with all key strategic customers at least annually •

Ideally you want a representation from across the customer base. In other words, key • accounts/customer groups, segments

Cross-functional and Decision-Maker level participation by both supplier and customer •

Typical business units involved include Products, Key Practice or Industry Groups, • Marketing, Service and Operations

Sales team participation is critical as they have the relationship with the customer and • are effective in engaging the customer in discussion and providing follow-ups

Uses a discussion guide as a starting point •

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Benefits of strategic customer discussions

Ensures that latent or un-articulated needs are captured. Customers are better at • stating what they are trying to achieve

Ensures insights gathered are relevant among all customers •

Helps organizations move from a transaction based relationship to a deep, • longer term relationship due to increased understanding of customer’s needs and perceptions of value

VALUE BASED DISCUSSIONS - FROM THE CUSTOMERS’ PERSPECTIVE

For your strategic customer discussion to be successful, there must be value in the discussion from the customers’ perspective. Ensure that your discussion is focussed on obtaining an understanding of:

Customer’s key issues, priorities and value drivers •

Activities/tasks customer seeks to complete •

Outcomes to be achieved •

Quantified Value impact (eg. on generating revenues, reducing costs)•

SAMPLE QUESTIONS FOR STRATEGIC CUSTOMER DISCUSSIONS

The following questions that can be used as a discussion guide to initiate strategic conversations with business customers.

Note: These questions merely serve as a starting point. Issues need to be probed and discussed as they arise.

What are the critical issues facing decision-makers as they evaluate our product or • service?

What do you expect from us in a deeper, competitively- differentiating relationship? •

What are the areas you value about our company and where would you like to see • us invest / focus more in the future?

What value attributes really set us apart from the competition? •

What makes one company’s offering better or worse than another? Why? •

What characteristics describe the ideal product or service offering? •

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A “STRATEGIC CUSTOMER DISCUSSION” PROGRAM

Which customers will you choose to have discussions with? (Note: Remember the 3 customer types)

Who will the participants of the discussion be? Who needs to be involved?Salesperson?Senior Leadership Champ?Account Executive?

What is your basic plan of how the discussion will progress?What will you address first?What can be left off if you run short of time? What are the key priorities?

What additional questions, apart from the sample questions above, will you ask?

What will your pre and post discussion activities be? What will be the customers’ incentive to participate?Will you send a hand-written thank-you note? Email? Gift?

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CUSTOMER INSIGHTS CHECKLISTS

Use the following checklists to determine what sources of customer feedback you are using and from which level are you gaining this feedback from your customers.

Consider:

Are you getting feedback from both Decision-Makers and End User levels? •

What mechanisms are you using to get strategic insights from Decision-Makers? •

Do these mechanism enable your company to obtain detailed insights at the • executive/strategic level?

Source Decision-Makers End Users

In-Depth Interviews

Customer Advisory Panels

Customer Visits/Workshops

Surveys

Focus Groups

Market Research Studies

Social Media

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Use this checklist to determine what kinds of customer feedback tools you are using for your different types of customers. Consider:

What kind of approaches you are using with the different customer types? •

Are you getting the strategic level insights your company needs?•

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Documents

B2B Customer Engagement Strategy - 2Excell2excell.com/wp-content/uploads/Customer-Engagement-Strategy.pdf · B2B Customer Engagement Strategy page 1 Introduction B2B Fundamentals